|
There are a lot of people who realize about tax saving investments when the financial year-end is only few months away. Normally, you should think a mix of insurance plus investment to save taxes. As said by experts, you should begin with health insurance, when you can get deduction of premium under Section 80D if Income Tax Act. After that think about life insurance premium payments, this is eligible for deduction u/s 80C. The life insurance cover is very important if you have people monetarily reliant on you. Then you should concentrate on the investment upto Rupees 1 Lakh which is eligible u/s 80C. You can in addition save taxes by putting in up to Rupees 20,000 in long term infrastructure bonds.
Health insurance policy premium can save your tax up to Rupees 35,000. That includes Rupees 15,000 premium for self, spouse and kids plus Rupees 15,000 for premium paid towards non-senior citizen dependent parents or Rupees 20,000 for paying premium towards senior citizen- reliant parents.
While taking life insurance stick to a pure term plan only, this offers you a big risk cover at a very small premium.
Public Provident Fund- At the time of looking for suggestion on investment opportunity, you are probable to find PPF the most preferred of taxpayers. because both contributions and income are free from from taxes.
Tax-Planning Mutual Fund Schemes- If you do not have some equity experience, in that case the most excellent alternative for you is to invest all your funds in an ELSS. However if you have some equity experience, in that case you should invest in together in PPF and ELSS.
Investment in infrastructure bonds will be in addition to the general tax deduction limit of Rupees 1 lakh under Section 80C, 80CCC & 80CCD of the Income Tax Act.
You can save income tax up to Rupees 1.5 lakh under section 80E if you are making payment towards interest for an outstanding housing loan.
A few of these tax saving options may not work once the Direct Taxes Code (DTC) Bill, 2010, take the place of the existing Income Tax Act 1961.
Those persons who have not planned or started on saving tax this year until now have to start now. There are particular investments and costs that are free from income tax under the Income Tax Act. Investors should prepare their investment planning cautiously so as to obtain a good deal in terms of tax saving in addition to returns on the investments.
|
